The Longest Real Estate Closing Ever?!?! Finally – Resolution!

On that date, I went into contract with a buyer of one of my properties.

Fast forward one hundred and fourteen days later (114) – Today – And look at my joy!

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WE FINALLY CLOSED!!

In that time, my buyer went through 2 mortgage brokers, 3 banks, and I think we’ve both lost more than a little bit of our hair. We’ve dealt with countless people who repeatedly lied to us about closing dates. We’ve spoken with many individuals who WOULDN’T commit to ANY closing date, despite that being the norm – isn’t it? To say that the banks and others we’ve dealt with simply toyed with our emotions, would be putting it kindly.

Throughout this horrifying experience, I did learn a few things:

The banks don’t want to lend out money anymore – with the government clamping down and mortgage write-offs in the high billions, it seems that banks are doing everything in their power to avoid giving out loans.

Loan and Mortgage Insurance Underwriters are coming up with excuses not to fund. One of the ridiculous examples of this came when we had a MI underwriter deny closing because he wanted to see photographic proof that a bathroom window could be opened. This was repeated several times over with other, equally outrageous requests.

Well qualified buyers with good credit, high net worth, and high incomes are no better than folks with crummy credit and no money, these days.

I’ve lost even more faith in the word of man. WAY too many promises to me were broken in the past 114 days to put a number on, and it just takes a little bit away from your faith in mankind.

All in all, I could write a book about this closing (and likely will), and one many times thicker about the nightmare that I faced when I owned the property. I’m beyond ecstatic that it is out of my hands and I wish the buyer all the success in the world with it — I know he’ll make it a success!

NOTE: This property was one of the ones I spoke about in A Rental Property Management SNAFU Story, and there have been quite a few nightmare situations that arose in the short time (3+ years) that I owned it.

Now . . . to take that deep breath I’ve been waiting for all these months . . . Lets just say that I REALLY Deserve a Vacation!

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About Author

Joshua Dorkin (@jrdorkin, Google+) founded BiggerPockets.com when he saw a need for free, trustworthy information about real estate investing online. Over the past 12 years, Josh has grown the site from self-funded hobby to full-time job and passion. Today, BiggerPockets brings together over 850,000 members, housing the world’s largest library of real estate content, iTunes’ #1 real estate podcast, and an array of analysis tools, all geared toward helping users succeed.

As a Realtor who had 3 closings fall apart in March due to some stupid reasons (not quite so stupid as photographic proof of a window opening) – I can honestly say I feel your pain. One of the deals I had worked months on fell apart one day before closing – the lender denied the buyer the loan because they said the property was “inappropriate”. Apparently the lender felt the home was too close to train tracks and wouldn’t hold its value.

Not only are we dealing with lenders who seemingly just don’t want to lend any money to anyone, we’re dealing with underwriters and loan officers who are dealing with requirements that change daily. There have been numerous errors (by the lenders or underwriters – not me) in other deals that I’ve had to work out because things are so topsy-turvy right now. Noone seems to know what they heck they’re doing anymore.

fathersez – Were you in contract for 5 months, or was the property for sale for 5 months? If your property was in contract for 5 months and the buyer couldn’t close, then that blows our situation away. If the property was for sale for 5 months, then I feel for you, but that is not that spectacular in this day and age. The aforementioned property was for sale for 1.5 years and I went through quite a few buyers before the one who just closed with me.

Aurora Realtor – Please jump on our forums and share some of your tales of woe with us. I’d be very interested (as I’m sure others would as well) in hearing about all the troubles your clients have gone through lately. I am sorry that you and they have had to deal with this nonsense, BTW.

Should a differentiation be made between the lending climate for people in different regions and for different types of properties? Or is it your sense that across the country, regardless of region, and across different types of properties (e.g. single family home purchase as primary residence, multi-unit rental property) banks and related institutions are becoming very tight with financing options?

I’ll say that it is happening across the country, especially with the national lenders. I’ve heard that people are having a somewhat easier time with small, local banks, but I can’t verify that for sure.

>Should a differentiation be made between the lending climate for people in different regions and for different types of properties?

I have a different view than some due to the geographical nature of my firm’s business. We do business in several states, and see distinct differences in lenders’ ah, enthusiasm for the different regions.

In CA & AZ for example, a close lender buddy has recently seen appraisals reviewed three times for a purchase with a 50% down payment. If the appraisal was knocked DOWN 25% arbitrarily they’d still be only lending on a loan to value of 67%!

Yet in Texas, we’re closing 90% investor loans barely slower than pancakes being sold at a Boy Scout breakfast. Lenders know where they’d like the money to end up, as they listen intently when their investors yell, ah, whisper into their ear. 🙂

Great post. There are a lot of people who feel the same way that you do and can testify to the intensity of the crash that we have experienced. In Utah we are starting to see some growth and the attitude of consumers is beginning to change. Thanks for helping us feel normal.

I once listed a short sale that took 3.5 months to close after we had an accepted contract. It gave me more than a few sleepless nights.

OTOH, I learned a tremendous amount about holding a deal together. I think in the end, I got paid about .04 cents/ hour on that one, but the education was priceless!

When I tell people about this, typically at this point, the question comes up: Would you do it again?

We held the closing (separate, and dry!) on a card table in a quiet corner of a CVS Pharmacy. As my sellers gathered up their things and we prepared to say our good-byes, they turned to me, looked me square in the eyes, took my hand and said “Thank you so much! We really don’t know what we would have done without you.”

I would Teri. Sadly, I was in a very weak position and my buyer was really one of a few options left on this property for me. Since he wanted the property, regardless, we were able to keep it alive and make both of us happy.

I’m right with you all. I’ve got a deal that’s been on the table since Jan. 27th, and I STILL have no closing!!! In fact, our loan was JUST refused again… Yes, I’m in Phoenix, AZ. We had to give photo proof that a window existed one time, because the last appraisal showed it boarded up. A little better than the window opening story, but still. We’ve gone through about 6 loans and banks ourselves to be rejected a day before close. In fact, our latest loan just got refused on THE DAY of funding because they wanted another month of paperwork to prove we aren’t running out on our current house, which is 50k upside down. Ridiculous!

I am on day 109. This is actually my second buyer. My first one defaulted. So this is 109 days with the SECOND buyer. I have only been through two banks. After 64 days the manager at the first bank told me that the loan officer was fired from the first bank for fudging the income and W2 information of the buyer on the loan application paperwork, so she got a job at a second bank….I found this out by accident because my real estate agent neglected to tell me about any of this….and my buyer followed the loan officer over to the second bank to apply for a new loan. My buyer is finally approved for her new loan, and my house has had to be re-appraised, and now my appraisal is sitting on the desk in the under-writers office at the new bank and I can’t seem to get anyone there to reach out their hand and grasp the paperwork to look at it, even though they have had it for a week. I called the bank today to ask them to please, please look at the appraisal, because of a major personal emergency situation that has arisen, and their response was that I am not the borrower and they can’t give me any information about the loan, and that if I want any information about the loan I have to contact the borrower.